The Negotiation Canvas®
Since Alex Osterwalder published his Business Model Generation book, I have been fascinated by Canvases as a way to take complex knowledge and make it applicable, intuitive, and easy to use.
Years after the first publication of that book, and after having used the Business Model Canvas extensively in my consulting practice, I attended his Strategyzer Bootcamp in Switzerland for a week. As part of one of the exercises there, I created the first version of our Negotiation Canvas®.
I owe a debt of gratitude to Mr. Osterwalder for this inspiration and the suggestions he made to my first iteration. Since then, we have improved that early version into the present one, which we now use in every kind of negotiation, from high-stakes business deals and government policy to personal agreements.
The design of the Negotiation Canvas® is built on six foundational premises:
- Triple Perspective: Every negotiation must be viewed through three lenses: Tactical, Strategic, and Value Capture. The Canvas integrates all three into a single, cohesive view.
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The Pareto of Preparation: 70% of success in negotiation is the result of preparation. The Canvas acts as the "Pareto" of preparation, ensuring that 80% of your results come from the 20% of variables that truly matter.
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The Learning Loop: Every important negotiation should be documented.
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At the organizational level, this creates learning curves by capturing experience and measuring outcomes.
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At the individual level, it facilitates the critical "learning loop" necessary to improve skills over time.
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Internal Alignment: It allows you to align your internal team and stakeholders around a clear mandate before you ever sit down at the table.
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Common Language: It creates a shared vocabulary for more effective and intelligent strategic conversations within your organization.
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Storytelling: It lends itself to "storytelling" the negotiation, providing a framework to explain the strategy thoroughly to other parties, including those who are not experts in the field.
The Three Dimensions of Negotiation
The Negotiation Canvas® forces you to consider three key dimensions:
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Tactical Dimension: This defines the quality and effectiveness of your interaction with the counterpart, particularly in relation to building trust, information exchange to find hidden value, and the implicit use of cognitive biases for persuasion.
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Value Dimension: Negotiation is about maximizing value capture; the canvas helps negotiators create more value and then claim more value.
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Strategic Dimension: Helps assess the balance of power and identify specific actions to enhance your negotiation power.
The Nine Elements of the Negotiation Canvas®
To illustrate how the Canvas works, we will use the example of negotiating a consulting contract. Imagine you are a consultant seeking a high hourly rate, while the client is focused on managing a tight budget.
1 & 2. Interests (Ours vs. Theirs)
Identifying interests is the foundation of any negotiation.
As the saying goes, "Be firm with your interests and flexible with your positions." While your initial demands (positions) might seem rigid, the underlying reasons (interests) often lead to creative, mutually beneficial solutions.
When mapping Our Interests, go beyond the surface. Look for:
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Substantive Interests: The core deal points (e.g., the fee).
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Relational Interests: The desire for a long-term partnership or a referral.
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Procedural Interests: How the negotiation is conducted (e.g., wanting a fair and transparent process).
When mapping Their Interests, engage in active perspective-taking.
Ask "Why?" multiple times to uncover their deeper motivations.
In our consulting example, the client isn't just looking for a "low rate"; they might be looking for "predictable costs" or "risk mitigation" because their last consultant failed to deliver. If you can solve for their interest in reliability, they may become less sensitive to your price.
3 & 4. BATNA (Best Alternative to a Negotiated Agreement)
Your BATNA is your walk-away point; your best fallback option if no deal is reached.
However, a BATNA should not be a static concept. You should always strive for a Dynamic BATNA by taking specific actions to improve your alternatives before the negotiation begins.
Power Dynamics are a function of dependency. The party with the most power is the one that is less dependent on negotiation to meet its interests.
5. Issues to Negotiate
Issues are the building blocks of a negotiation.
Negotiating on a single issue (like price) inevitably leads to a win-lose standoff. By expanding the list of issues, adding things like payment schedules, scope, intellectual property, or duration, you create the "currency" needed for trade-offs.
6. Priorities
Rank your issues and estimate the client's priorities using a three-star system:
*** High Importance
** Mid Importance
* Low Importance
This facilitates logrolling: the act of trading a low-priority issue for a high-priority one. Look for "asymmetric value": issues that are low-cost for one party to give up but high-value for the other to receive.
7. Our Target (and Objective Criteria)
Research shows that setting ambitious, realistic targets leads to better outcomes.
Most importantly, a well-defined target helps you debias yourself from your reservation point (the lowest you are willing to go). If you only focus on your bottom line, you will likely end up near it.
Ideally, you should set your target based on the counterpart's reservation point, if you can discover or estimate it. By anchoring your target to objective criteria (market rates, precedents, or professional standards), you make your demands feel "legitimate" rather than arbitrary.
8. Multiple Equivalent Simultaneous Offers (MESOs)
MESOs are perhaps the most powerful tool for balancing cooperation and competition.
By presenting three different offers at once, each equally valuable to you but structured differently, you unlock several strategic advantages:
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Giving Choice: It moves the counterpart from a "Yes/No" mindset to a "Which one?" mindset, reducing the feeling of being coerced.
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Enhancing Trust: It signals flexibility and a sincere desire to meet their needs.
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Eliciting Information: By observing which offer the client prefers, you gain immediate insight into their hidden priorities without them having to say a word.
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Inducing Logrolling: It forces the conversation toward trade-offs across multiple issues simultaneously.
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Signaling Preparation: It demonstrates that you have done the work to understand the complexities of the deal.
9. The Intelligent Agreement
Reaching an agreement is only half the battle; the other half is ensuring it is implementable.
An "Intelligent Agreement" is one that won't fall apart three months into the project. To design a deal that lasts, take the following into account:
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Implementation Mindset: Start with the end in mind. Imagine the deal a year into its implementation. Is it working? What could go wrong?
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Stakeholder Alignment: Ensure that everyone who has the power to "veto" or disrupt the implementation is aligned with the mandate.
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The Social Contract: Beyond the legal terms (the "what"), clarify the spirit of the deal (the "how"). How will you handle unforeseen changes in scope or budget?
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Consistent Communication: Ensure that the negotiators and the implementers (the people doing the work) are speaking the same language.
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Practical Problem-Solving: Address potential roadblocks—like reporting requirements or payment delays—upfront to prevent them from escalating into relationship-breaking issues.
Final Thought: The Strategic Advantage
The Negotiation Canvas® transforms the "art" of negotiation into a disciplined, visual science.
It allows you to move from reactive bargaining to proactive strategic design.
By documenting your process, you ensure that every negotiation, win or lose, contributes to your organization's long-term intelligence and your personal skill set.
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